The “upselling” opportunity depends on training

From a recent RetailWire discussion, here are my thoughts on the volume opportunity of “upselling.” As usual, the issue depends on the kind of retailer we’re talking about:

Upselling can’t work everywhere — in a mass merchant or discounter, for example, where associate training is more focused on “process” like running the registers or restocking the shelves. But there are plenty of specialty stores (and even department stores) that need to make upselling part of associate training in the first place. Filtering out candidates during the hiring process if they are uncomfortable engaging with customers is the obvious place to start, followed by extensive role modeling after the hire.

Who does this the best? I’d argue that Nordstrom has always made it part of the company culture. In the shoe department, for example, associates are trained to bring out three pairs if the customer picks just one to try on. It’s a simple lesson for other stores to learn, if they’re willing to try.

Does “customer service” still have a meaning?

I’ve long maintained that “customer service” is in the eye of the beholder, especially depending on the type of retailer or website being visited. This is more true than ever in today’s “omnichannel” world, and here’s a recent RetailWire comment on the topic:

Customer service is part of (but not all of) the customer experience. The entire experience includes the store’s “silent salespeople” (store atmospherics, design, etc.), the interaction with e-commerce, the pricing strategy and above all the merchandise.

Meeting or exceeding customers’ expectations for “good service” depends on the type of store, as other panelists rightly point out. Good customer service in a high-touch atmosphere like Nordstrom is far different from what the Target shopper expects: Merchandise in stock, easy to find, and easy to pay for quickly. But getting this right is only one piece of the puzzle for any retailer.

Thoughts on Macy’s self-service shoe and cosmetics departments

RetailWire panelists just took on the subject of a new test at Macy’s, in which its shoe and cosmetics departments are being converted to “assisted self-service” instead of the traditional associate-driven model. In the case of shoes, Macy’s is getting more of its inventory out of the stockroom and bulked out on the floor, with apparent early success. I’m raising a caution flag, however:

It’s hard to tell whether the reconfigured shoe department is meant to be a sales driver or an expense saver. JCP recently reconfigured a store that I visited to mass out its shoe inventory — DSW-style — instead of depending on salepeople to find the right size in the back. (And these associates are often paid a commission, just like cosmetics salespeople.) But it gets to the heart of what Macy’s wants to be. As Art put it, are they trying to be JCP or Kohl’s? Are they finding the hidden costs of “omnichannel” (BOPIS and so forth) to be unsustainable for a traditional department store?

And one more issue: By abandoning the Nordstrom model (where the salesperson is trained to bring out three pairs of shoes when the customer asks to look at one), Macy’s may in the long run walk away from the sales and margin potential of “upselling” that shoe and cosmetics departments should be known for. A declaration of victory may be premature.

Should customers pay extra for service?

RetailWire recently posted an online discussion — about whether customers will pay an upcharge for customer service — that triggered plenty of comment. My perspective follows, and it is based on the idea that there is more than one way to define “service”:

To answer the question, you have to define “customer service” differently for different kinds of retailers. Customer service at Nordstrom means “high touch” and the SG&A cost of providing it is covered by high merchandise gross margins (or it should be). Conversely, expectations of “customer service” at Target are totally different — shoppers expect store shelves to be well-stocked and checkout lines to be efficient. Again, this lower-expense model is reflected in tighter merchandise margins.

My point? Customers are already paying for the “customer service” they seek in the stores they choose, based on the “cost of goods sold” that they are willing to pay. Any surcharge imposed by retailers to meet or exceed these expectations (hidden or otherwise) would be a bad idea.

What can retailers learn from the United fiasco?

Like everybody else, RetailWire panelists enjoyed a chance to speak out about the well-reported United Airlines incident, in which an overbooked passenger was dragged off the plane. The question I try to answer, below, is “What can retailers learn from this?”:

Consumers have choices of retailers, just as they (often) have choices of airlines and other service providers. One of the lessons that any customer-facing business ought to take away from the United fiasco is the need to empower employees to look past the policy manual when it’s time to exercise some good judgment. (In the case of United, it would have been easier to seek volunteers for rebooking instead of working from a mandatory list.) Policies are meant to protect a retailer’s assets and to manage risk, but they shouldn’t turn into a roadblock to common sense.

And the second lesson learned: If your company hasn’t learned the power of viral social networking by now, you’d better get your communications act together fast. Above all, don’t blame the consumer for your own missteps.

BOPIS: Good for Target’s business?

To answer the question in the headline, Target would say “yes.” But, as I discussed recently at RetailWire, these kinds of omnichannel initiatives can be a double-edged sword:

Claiming success depends on what metric you use. Target’s argument seems to be that a growing percentage of orders is being fulfilled by stores — which is doubtless true — but it misses the bigger picture:

1. Is Target growing its overall topline sales? How about other general merchandisers who are pursuing “ship from store” strategies?
2. Is the “ship from store” trend actually cutting down on store visits, and the chance to sell impulse items?
3. How is the multitasking sales associate (busy fulfilling BOPIS or ship-from-store orders) doing his or her core task of interacting with customers or replenishing store shelves?

On the third point, it’s clear that department stores in particular have allowed their in-store service levels to decline while they try to fund omnichannel initiatives out of the same expense bucket. But by all appearances the issue is costing Target sales, too.

Are retailers leaning too hard on tech?

Interesting debate recently (at RetailWire) about whether retailers are becoming overly reliant on technology to drive customer service and if it is actually backfiring. I have a mixed view on this one:

Tech solutions such as improved inventory management (RFID, for example) and line management at the checkout lane are actually positive for the customer. Most shopping happens in self-service environments, outside of the most “high-touch” types of stores. And even the Nordstroms of the world can benefit from good replenishment systems.

Where the tech advancement has fallen down lately is the increased emphasis on omnichannel solutions. Tasks such as BOPIS and ship-from-store are also distracting store associates from dealing as effectively as possible with the customers actually shopping in their stores.

Bloomingdale’s tightens its return policy

Here’s a brief comment from a recent RetailWire discussion about Bloomingdale’s. The subject is their new policy (and enhanced tag) meant to prevent customers from buying dresses for an occasion and then returning them the next day — essentially a “rent-a-dress” business. I agree with the policy, although not all panelists were on the same page on this one:

It’s one thing to have a customer-friendly return policy, and many retailers have used this as a marketing platform. It’s another thing entirely to subject yourself to customers who “abuse the privilege.” Bloomingdale’s is obviously more vulnerable than most stores because of its focus on “social dressing.” It’s clearly a big enough issue that Bloomingdale’s (and its vendors) have invested in the extra expense of the b-tag.

I think the move is worth the expected pushback on the social networks. Bloomingdale’s will need to deal with individual exceptions to the policy, however. It’s quite possible that a well-intentioned customer will buy a dress, remove the b-tags and find a valid reason (fit, defects in workmanship) to return the item.

Building trust through your return policy

George Anderson is a frequent contributor to RetailWire, and he started a discussion recently about the value of stores’ liberal return policies and why this is becoming a more important positioning tool. I have a few thoughts on the subject:

Like George’s experience at Target, Kohl’s has been known for hassle-free returns for many years and now JCPenney is making it a centerpiece of its brand reinvention. (Although when JCP’s key competitors are already known for it, hassle-free returns aren’t a very distinctive positioning tool.) It’s clearly something that resonates with consumers, and online retailers like Amazon have raised the bar on this element of customer service.

Walmart: End of the “greeter”?

My comment (below) was in a minority among fellow RetailWire panelists. The subject: Walmart’s transition from its famous “greeter” program (at the store entry) by redeploying these associates to help move customers through the checkout lanes. I see it as a positive:

Checkout lane management is becoming a more important part of the customer service process. Most customers would prefer an efficient experience at the end of their store visit, rather than the traditional Walmart “greeting.” I agree with this move, especially if it is expense-neutral.